Monday, March 31, 2008

Survey: Gens X and Y admit savings shortfall

WASHINGTON (3/31/08)--Members of Generations X and Y, despite saying they know they need to save for retirement and believe they can achieve important financial goals, report that they know more about making their iPods work than they do about making their money work for them (AARP March 19).

A report released this month by the American Savings Education Council and the Divided We Fail group (AARP, Business Roundtable, National Federation of Independent Business, and the Service Employees International Union) revealed a disconnect between what young adults know and what they practice.

Even though 86% know they should be more prepared for financial emergencies, 40% report that they're more knowledgeable about their iPods than they are about filing taxes (26%), buying a house (21%), investing outside their employer (15%), and saving for retirement (15%).

The report, "Preparing for Their Future: A Look at the Financial State of Gen X and Gen Y," indicates that young adults still aren't aligning actions with financial values and goals. The report serves as a wake-up call to these generations, as well as to older generations who need to educate Gen Xers and Gen Yers about the importance of starting to save early (American Savings Education Council March 19).

Other findings:

Nearly three out of five (57%) young adult respondents described themselves as "financially independent."

Only half of Gen Yers (52%) and Gen Xers (48%) save money regularly.

Only 9% say they feel very satisfied with their current financial situation.

Eight out of ten (83%) report having some type of non-mortgage debt, 65% have credit card debt, 48% have a car loan, 31% have student loans, 27% have medical debt, and 22% have some other type of non-mortgage debt.

More than one out of ten (11%) respondents say they have a home equity loan.

For this study, Gen X was defined as those born between 1968 and 1979, and Gen Y includes those born between 1980 and 1988.

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